Racking Up Some Ire

In the last few years, several Gannett dailies have quietly entered the business of handling distribution and display of free papers in their markets ? a business currently dominated by DistribuTech, AutoTrader, and a few others. In exchange for exclusive display rights at outlets such as convenience stores and supermarkets, the Gannett daily installs multi-titled racks and handles the delivery and cleanup of the papers. Typically, the daily charges a fee to other free papers that use the rack. Papers that don’t participate can’t distribute on the outlet’s property.

But this May, when The Clarion-Ledger, the Gannett daily in Jackson, Miss., began signing up outlets for the Distribution Network of Central Mississippi (TDN), the rollout didn’t go so smoothly.

Todd Stauffer, publisher of the alternative weekly Jackson Free Press, has almost single-handedly created a local controversy over TDN, which he says aims at nothing less than total control of the market’s free papers. He says the Clarion-Ledger, which has launched several free and niche publications in recent years, “probably sees this as an opportunity to kill at least two, maybe three” of the competing local free papers.

Since he was approached to participate in TDN ? which he says would drive his publishing costs up as much as 20% ? Stauffer has blasted the Clarion-Ledger and Gannett on talk radio, television, and in the paper’s online “GoliathBlog.” The Free Press has even formed an alliance with a dozen other local free papers to convince store owners to reject TDN. Stauffer says many of his best drop spots signed on unaware that it meant the Free Press could no longer be distributed at the outlet. Some have since backed out of these agreements, according to Stauffer and Gannett.

In a statement, Clarion-Ledger Publisher John Newhouse said TDN would help merchants by controlling “the clutter of racks on their property,” would help publishers expand their distribution area, and in many cases cut delivery costs: “A distribution network will happen in Metro Jackson, if not by The Clarion-Ledger, then quite possibly by a distribution company with no connection to Jackson or Mississippi.”

But Stauffer says a third-party distributor like DistribuTech at least has no competing papers in the market. “The Clarion-Ledger, on the other hand, is not presenting us with a product ? they’re presenting us with an offer we can’t refuse.”

Gannett spokeswoman Tara Connell says the Clarion-Ledger is only creating an increasingly common business modeled after distribution networks like DistribuTech: “This is not big, bad Gannett doing something new, and bullying everybody into it. This is a win-win for everyone involved.” The Gannett papers are “not elbowing people out” of stores, she adds, but simply making free-paper distribution easier for publishers and store owners: “The store owner says, ‘Finally, all this clutter is gone from my shop, I have room for more merchandise.'”

Gannett Co. is not behind the rollout of these businesses, Connell notes: “There’s no mandate, no order from corporate to do this.” Individual papers, she adds, are launching their networks differently. Distribution networks, often also named TDN, have been launched by Gannett dailies in Des Moines, Iowa, Greenville, S.C., and Sioux Falls, S.D. But free-paper publishers say there’s a definite pattern. Calla Scott, who runs the central Iowa edition of the free publication JobDig, said when the racks were introduced in Des Moines, she was told she could use them. In early June, though, she was notified they were now off-limits. “That’s how they did it in Sioux Falls, too,” Scott says.

Shane Goodman, publisher of Cityview, an alternative in Des Moines, wrote E&P, “I fail to see how independent publishers can win at any level when these Gannett dailies launch a myriad of competing publications and then control what other papers can be on the racks, what spots they get, and how much their rate is to be there. They simply can’t be trusted.” Gannett’s Des Moines Register, however, is not currently charging other papers in that market for space on its racks.

James Shannon, who owns the alternative newspaper The Beat in Greenville, S.C., says the TDN from The Greenville News was part of the reason the paper he edited, MetroBeat, folded as a print publication. The News also publishes a free youth-oriented weekly that competed directly with the alternative. “The problem with [TDN] isn’t the boxes, but that it drives papers out of the outlet, which is the intent,” Shannon says. “They want to eliminate the alternative, and the apartment magazine, and every other competing free pub.”

Gannett’s Connell says driving papers out of business is not the intent, but TDN is a product of changing conditions: “It’s not us doing this, it’s AutoTrader, it’s DistribuTech. The business is there, and you can’t really fault us for saying, ‘This is a good idea, let’s get in on the ground floor.'”